NOVATO -- Wineries across the North Bay experienced roughly a 12 percent cost increase in their employees' health plans this past year, a figure that is commensurate with other industries but one that runs counter to last year's results, according to a new survey.
And wineries, like other employers, were confident that health care reform would only increase their premiums marginally, with about 73 percent saying premiums would go up by about 4 percent, according to Woodruff Saywer & Company's annual insurance benchmark survey.
The survey, which tracks health insurance costs for some 300 companies across the Bay Area, breaks out a subset for wineries. Last year was the first year it did a break out for wineries, and it found that they spent less on employee benefits than other industries while contributing more to employee premiums.
Wineries still contribute a good deal to employee premiums, but escalating health care costs have caught up with the industry, said Chris Reiter, vice president of Woodruff's employee benefits practice in Novato. Wineries also made significant changes in plan design as a result of the rising costs, Mr. Reiter said, also a prevalent theme among other industries.
"It's pretty much right there with the overall market," he said.
But significant changes did occur, again the result of rising health care costs. Whereas other industries have raised co-pays and deductibles on employees, the wine industry did not, but recouped cost on reducing dependent spending, according to the Wine Industry Health and Welfare Benchmarking survey.
"Where you started to see some changes was in contributions for dependents of winery employees," Mr. Reiter said. "For PPOs, there was about a 5 percent reduction of what employers were paying for their employee's dependents. When a winery had to make a decision, they chose to maintain paying their employee."
About 40 wineries took part in the survey, representing roughly 15,000 employees and approximately $150 million spent on health care. Some of the Napa and Sonoma's biggest wineries were a part of the survey, including J Vineyards, Francis Ford Coppola, Trinchero Estates, Gloria Ferrer and Gallo, among others.
Increasingly, wineries shifted toward so-called consumer-driven health plans, like health care savings accounts (HSAs) and health reimbursement accounts (HRAs), the survey found.
Thirty eight percent of all wineries had HSAs or HRAs, and another 28 percent of wineries were considering offering employees such plans, representing nearly two-thirds of wineries, according to the survey.
"They continued to gain prevalence," Mr. Reiter said, adding that such plans often have high deductibles. Proponents of HSAs and HRAs often say such plans allow an employee more control over their health spending.
The difference with wineries is that, while many are shifting to such consumer-health driven plans, they're still funding a sizable portion of the deductible, according to Mr. Reiter.
"The wineries were fairly generous with these accounts for what they were contributing," he said. The median deductible for such plans was $2,000. Of that, wineries contributed $1,250 in either HSAs or HRAs, according to the survey.
The survey also found that only 5 percent of employers said they would likely drop plans altogether as a result of health care reform -- a significant development, Mr. Reiter said.
"This is coming straight from the horse's mouth -- only 5 percent said they won't keep offering benefits," he said. "Basically employers are optimistic that health reform will only increase their costs marginally. There's some hope and optimism that it will decrease costs eventually, but that isn't the overall sense."
